How Top Retailers Manage Store Operations: Staffing, VM, Stock & Customer Experience

A Dubai fashion retail store faced an all-too-often problem on a busy Saturday. Customers were at the register lines and fitting room lines, while shelves were not stocked with fast-moving sizes; staff rushed between fitting rooms and cash wrap areas, and visual displays appeared incomplete; on the other hand, the warehouse was stocked too much with slow-moving stock.

While the retailer believes to various degrees that its departments were doing well, in reality, the inventory management team focused only on stock levels, visual merchandising teams operated according to seasonal plan, and store associates (employees) tried their hardest to help customers but the store continuously failed to meet its performance targets.

Retail industry consulting is able to dramatically improve outcomes by changing how retailers manage their businesses. Leading retailers use integrated systems, implemented through standard operating procedures (SOPs), and conduct verifiable audits to manage their entire business as one cooperative unit.

The primary separation of businesses by size has caused many small to medium enterprises (SMEs) globally to encounter the same types of problems; however, without structured management consulting, retail locations rely primarily on individual efforts to generate business versus utilizing processes that provide consistent results; consequently, all locations of a retailer will experience inconsistent business and revenue performance.

Why Retail Operations Fail Without Integrated Retail Management Consulting

Stores usually do not close because of not trying hard enough. Stores usually close because they are not integrating.

Many operations have missed areas such as:

• Using traffic counts to determine staffing instead of using intuition
• Creating merchandising differently in different stores
• Replenishing stock with what is available at the distribution center instead of how quickly something sells
• Handling customer complaints but not connecting them back to the root operational issue

For example, fast-moving goods often sell out while slow-moving goods sit on the shelf. The store associates typically feel overworked because the staff scheduling does not account for peak times.

Most retail management consultants will start out by mapping the operational dependencies at the business. Leading retail management consulting companies will focus on the link between people, process and technology rather than just optimizing individual departments.

For SMEs that are growing, the gaps get much bigger as the additional stores open and become more inconsistent unless someone is providing standardized retail management consulting services that helps them scale their store execution globally.

How Top Retailers Design Store Operations Through Retail Consulting

Leading retailers understand the importance of having an organized store performance process using systems engineering principles.

When developing a structured retail consulting platform, they create:

• Daily store operations and procedures (SOP’s)
• Clarity in roles/responsibilities for all teams (store, warehouse, and planning)
• Replenishment and staffing plans that are developed using systems data
• Customer experience (CX) standards that are developmentally defined.
• They are proactive in preventing problems one level at a time through planning.

For example, the following items are factored into staffing schedules.

• Prior year sales data
• Seasonal trends of demand
• Foot traffic/quantity of customers entering/exiting stores
• Date of sales promotion

Store audits are conducted constantly to ensure compliance in all areas of the store. While they are used for compliance purposes, they also serve as a vehicle for continuous improvement.

Retail consulting helps retailers transition from a people dependent performance model to a systemic driven performance model. This will allow retailers to have comparable store performance across cities, states, and demographic groups.

Staffing Management: Right People, Right Time, Right Roles

A global retailer of shoes found that it had high turnover rates in addition to low customer satisfaction ratings. The problem was not that the company was hiring bad employees; the issue instead was having too many employees or not enough work for the employees in the store.

They worked with a consulting firm who specialized in retail management services to create a staffing model based on the volume of work to be done by the employee rather than based on an arbitrary number of hours.

The models that have been created and used most frequently among leading retailers today are:

• Traffic-based shift planning;
• Role-based task distribution;
• Cross-trained store teams;
• Real-time task dashboards;

The above mentioned frameworks help store team members understand exactly when the following activities need to be performed:

• Replenishing merchandise;
• Providing customer service;
• Making visual merchandising corrections;

Retail management consultants also create productivity metrics which help to eliminate employee burnout and provide consistent customer service experience.

This is especially critical for small to midsized businesses. Many small retailers operate with a lean staff. Without a structured approach to creating and managing store staffing, employees use multiple functions/roles resulting in not only poor customer experience but also poor execution in the store.

Visual Merchandising Execution to Drive Sales

Most people confuse Visual Merchandising (VM) with simply decorating their stores. The best retailers have proven that it’s a key driver for sales.

One luxury cosmetics manufacturer learned that the inconsistent interpretation of their VM guidelines was the reason for unequal sales in different locations. Through retail industry consulting, the manufacturer created execution checklists and created a digital VM tracking system to eliminate these issues.

Standard VM Management best practices include:

• Execution driven by planograms
• Photo-based compliance audits
• Weekly micro VM corrective actions
• Localized VM modifications based on local demand

Most retail management consulting firms include VM within their store audit scorecards; thereby enforcing accountability.

When VM is standardized across multiple stores:

• Customers can find products quicker
• The ability to cross-sell improves dramatically
• Brand perception remains consistent globally.

Retail consulting firms help SMEs expand into multiple regions by ensuring standardization of VM so that their brand appears the same in all of their stores, while at the same time reducing the amount of time required to oversee every store’s visual presentation.

Stock Management: Moving From Warehouse Thinking to Store Thinking

A national electronics retailer had plenty of inventory in their warehouses but experienced multiple periods of stock outs in their stores. The problem was in their replenishment logic. Retail management consulting services helped them adopt a sales-driven replenishment approach.

Today’s retail stock management frameworks include:

– Fast moving auto-replenishment.

– Slow-moving liquidation triggers.

– Store level visibility of stock.

– Real-time inventory dashboards.

Top retailers are pulling stock based on actual store demand, rather than pushing stock through the supply chain.

Retail consulting often integrates point of sale data into supply chain systems so that retailers’ planners have the ability to see what is currently selling rather than what was sold last month.

The Role of Audits and Systems in Retail Management Consulting

Many people perceive audits as an enforcement mechanism; however, leading retailers treat them as a way to create progress.

Audits created by retail consulting companies include parameters for audit assessment to determine areas requiring improvement, including:

• Operations of a store
• Execution of visual merchandising
• Productivity of employees/staff
• Customer service readiness
• Accuracy of inventory

Use of digital audits can provide additional benefits such as:

• Capacity for real-time scoring
• Tracking of problems
• Identifying root causes
• Identifying gaps in training

By utilizing retail consulting, audits can help create action-oriented outcomes rather than just providing reports.

By integrating systems with audit processes, retailers are able to recognize trends sooner and eliminate the recurrence of operational problems.

When smaller businesses begin to grow through multiple locations, the use of structured auditing to build discipline in each location helps to ensure that as they expand into new locations they will maintain the same level of quality in their stores.